CONTENTS

British Minister for Europe David Lidington has declared his
governments strong support to the UN effort to achieve a settlement in
Cyprus based on a bi-zonal bi-communal federation with political
equality as defined by the relevant Security Council resolutions.

``We are committed as a government and as a country to a settlement by
Cypriots for Cypriots to deliver a prosperous and united Cyprus,``
Lidington said speaking on Wednesday at a meeting at the House of
Commons called by the All Party Parliamentary Group for Cyprus presided
over by conservative MP David Barrowes.

Minister for Europe also declared his governments commitment to the
Memorandum of Understanding signed by the two countries in 2008, which
calls for the cooperation between them to unify the island.

``I want to assure you,`` Lidington said, ``that the Prime Minister,
the Foreign Secretary and I are all actively engaged in support of both
President Christofias and Mr Eroglou as they work together within the
UN framework to reach an agreement acceptable to all the people of the
island.``

``Turkey has a role to play and the Britain continues to urge it to
meet its obligations under the Ankara protocol and encourages the
leader of the Turkish community to be bold in the negotiations. Now is
a critical moment in the history of the island and I commend the two
leaders for the effort they are making,`` he said.

``We all understand the domestic pressure they are under. But, the
situation calls for strong leadership and I offer support by the
government I represent for bold action which could lead to a
settlement,`` he added. The Minister said that he would be visiting
Cyprus quite soon.

Shadow Minister for Europe Wayne David speaking at the same meeting
said that former Foreign Secretary Jack Straws article proposing
official support to a partition solution for Cyprus is only his
personal view, which is not supported by the leader of the party Ed
Miliband or by the Shadow Foreign Secretary Yvette Cooper.

``The invasion was wrong and illegal and can not be legitimised in any
way. A settlement can be reached if there is political will on both
sides. The role of the United Kingdom is not to dictate what a party
may or may not do but give all possible support to both sides in
getting together and having a mutually acceptable agreement. The new
Government has essentially taken forward the approach of the Labour
administration,`` he added.

``In the crucial period of the next two months we are with the
government to ensure that there will be a lasting peace in Cyprus,
peace based on reconciliation, mutual respect and, above all, on the
reunification of the island,`` he noted.

David also said that the disruption of the Christmas service at the
Rizokarpaso church was a cross human rights violation.

Minister of Foreign Affairs Markos Kyprianou departs on Thursday
evening for Egypt, where he will pay a visit on 14-16 January.

According to an official announcement, in Cairo Kyprianou will meet
with his Egyptian counterpart Ahmed Aboul Gheit, with whom they will
discuss bilateral relations, relations between the European Union and
Egypt, the Middle East peace process and the Cyprus problem.

During his visit, the Foreign Minister will also have separate meetings
with the Patriarch of Alexandria and All Africa Theodoros II, the Grand
Imam Sheikh of Al-Azhar, Bishop Moussa of the Coptic Church, as well as
the Presiding Boards of the Hellenic Community and the Cyprus
Brotherhood of Cairo.

The remarks made by Moody`s rating agency justifying its decision to
put Cyprus` Aa3 government bond ratings on review for a possible
downgrade comply with the government commitment to fiscal consolidation
of public finances and rectifying structural problems faced by the
Cypriot economy, Finance Ministry said in a statement.

Moody`s decision to put the Cypriot economy on review was taken in view
of the macroeconomic challenges concerning the improvement of public
finances, the long-standing competitiveness issues and the size of the
island`s banking sector and its exposure to macroeconomic stress in
Greece.

``The review complies with the political commitment of the government
to fiscal consolidation of public finances and the solution of
structural problems facing the Cypriot economy for decades,`` the
Finance Ministry says.

Concerning Moody`s comments regarding the banking sector, the Ministry
notes that the government ``is convinced that the sector remains robust
and it is positioned to overcome possible shocks which may arise.``

Head of the European Commission Representation in Cyprus Androulla
Kaminara discussed here on Thursday problems which the Turkish Cypriot
community faces due to the economic crisis and the controls of the
so-called Turkish Cypriot authorities on the movement of goods from the
southern government controlled areas of Cyprus to the northern Turkish
occupied part of the island with a delegation of the Turkish Cypriot
party United Cyprus, headed by party leader Izzet Izcan.

In statements after the meeting, she said that it took place in the
framework of the contacts which the Representation has with Greek
Cypriot and Turkish Cypriot parties and that they discussed issues
which concern Turkish Cypriots.

Some of these problems are the difficulties which Turkish Cypriots face
when buying goods from the government-controlled areas of the Republic,
since when they return to the occupied areas they are subject to
control by the occupation authorities at the crossing points,
separating the occupied areas from the free areas of the Republic,
which operate to facilitate movement of people to and from these areas,
she noted.

She also said that they discussed the problems which Turkish Cypriots
face with regard to the economy and the situation in general in the
Turkish Cypriot community.